2007 Session

Budget Amendments - HB1650 (Member Request)

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Chief Patron: Hamilton
Redirect Savings from Generic Drug Reimbursement to Pharmacy Dispensing Fees (language only)

Item 302 #17h

Item 302 #17h

Health And Human Resources
Medical Assistance Services, Department of

Page 322, after line 16, insert:
"5.  By April 1, 2007, the Department shall conduct a preliminary analysis of the fiscal impact of the implementation of "Average Manufacturer Price" (AMP), as required by the federal Deficit Reduction Act of 2005, Public Law 109-171.  If the analysis indicates that the average savings amount resulting from AMP implementation will exceed the amount projected by the department and included in the Medicaid forecast for fiscal year 2008 and contained in the 2007 budget introduced as House Bill 1650 and Senate Bill 750, the total recalculated savings shall be allocated, retroactively if necessary, toward a pro rata increase in pharmacy dispensing fees for the remainder of fiscal year 2007 and fiscal year 2008.  The allocation shall not exceed the aggregate reduction in reimbursement to pharmacies that results from AMP implementation."

(This amendment requires the Department of Medical Assistance Services to analyze the fiscal impact of the federal Deficit Reduction Act (DRA) of 2005 changes which impact state payment and rebates for prescription drugs under the Medicaid program. If the analysis indicates that the new calculation of best price using the Average Manufacturer Price results in more savings to the Medicaid program than anticipated, the department is required to allocate the savings towards an increase in the pharmacy dispensing fee effective April 1, 2007. The federal Centers for Medicare and Medicaid Services (CMS) anticipate that changes in calculating the federal upper limits for prescription drugs will impact local pharmacy reimbursements as states adjust their payment methodologies to reflect the ingredient cost of the prescription drug. Consequently, CMS has advised states to reexamine and reevaluate the reasonableness of the dispensing fee paid as part of the pharmacy claim. Any changes made to current Medicaid payment rates require the submission of a Medicaid State plan amendment and approval by CMS.)